Stocks set to open lower

Wall Street was headed for a lower open Friday after the previous session's strong finish, as nervous investors anticipated gloomy readings on the sagging housing market and consumer sentiment.

The Commerce Department is expected to report at 8:30 a.m. Eastern time that new home construction dropped in September to an annual rate of 880,000 units, according to Wall Street economists surveyed by Thomson/IFR. Later, at 10 a.m., the University of Michigan is anticipated to report that consumer sentiment is declining in the month of October.

The market is also waiting for a speech by President Bush, who is expected to give more details on the government's plans to resolve a financial crisis that has threatened to hurtle an already weak economy into a long, steep recession.

Ahead of the market's open, Dow futures fell 115, or 1.28 percent, to 8,851. Standard & Poor's 500 index futures fell 12.90, or 1.37 percent, to 928.10, and Nasdaq 100 index futures fell 26.25, or 1.98 percent, to 1,296.75. Stock futures were off their lowest levels for the morning, however.

It's been an erratic week on Wall Street, with the Dow soaring 936 points on Monday, slipping moderately Tuesday, sinking 733 points Wednesday, and then rallying 401 points Thursday. The volatility is not providing investors with much relief, but it is a welcome change from last week's seemingly relentless plunge, during which the Dow logged its worst week ever and Wall Street lost about $2.4 trillion in shareholder wealth.

The credit markets have been improving after moves by governments around the world, particularly plans to buy stakes in private banks to boost their lending. But there's still high demand for Treasury bills, regarded as the safest assets around, an indication that there is still much fear in the markets.

The three-month Treasury bill Friday yielded 0.45 percent, down slightly from 0.47 percent on Thursday. The yield has not surpassed 1 percent in more than a week.

The dollar rose against most other major currencies.

Light, sweet crude for November delivery rebounded by 75 cents to $70.60 a barrel in premarket electronic trading on the New York Mercantile Exchange. On Thursday, it sank to a 14-month low on worries about a deep global recession obliterating fuel demand.

In earnings news, Schlumberger Ltd. reported a rise in third-quarter profit that was in line with analyst expectations. The oil field services company said tougher times might lie ahead, though. Manufacturing conglomerate Honeywell International Inc.'s report was similarly cautious: a better-than-expected quarterly profit increase, but a tightened outlook for the year.

Late Thursday, Google Inc. posted a 26 percent increase in third-quarter profit. Google shares surged more than 10 percent in premarket trading; early Thursday, the Internet company's stock had fallen to a three-year low.

Markets overseas were mostly higher on Friday.

In Asia, Hong Kong's Hang Seng index dropped 4.44 percent to its lowest level in almost three years, but Japan's Nikkei average rose 2.78 percent after a 11.4 percent loss Thursday. In Europe, Britain's FTSE index traded up 0.66 percent, Germany's DAX index rose 0.21 percent, and France's CAC-40 rose 0.96 percent.

--- (Copyright 2008 by The Associated Press. All Rights Reserved.)